The Amazon B2B Method to Thriving in the New Era of B2B eCommerce

Jeff Reekers
May 15, 2015

The Amazon B2B Strategy

To build, or continue building, a successful and sustainable wholesale brand, don’t ask what will be different in the next ten years. Rather, ask yourself what will be the same, and build your business strategy around that. This is the advice of Amazon CEO Jeff Bezos as highlighted in an interview with Above the Crowd earlier this year. Taking this a step further, Bezos has built his business on the philosophy that a business should be structured around stability––things like premium customer experiences and increased efficiency in shipping and receiving orders. Applying this approach specifically to wholesale industry, Amazon recently launched the Amazon Business Marketplace to upgrade their presence in the B2B eCommerce scene. Undoubtedly, Bezos will be sticking with the same customer-centric philosophy to lead this Amazon B2B initiative. But what, exactly, does this approach mean for B2B eCommerce on a wider level? What are the core components of the marketplace that wholesalers can better serve to meet customer needs both now and ten years down the line?

The Path to Today’s B2B eCommerce Boom

To better understand where B2B eCommerce is going, we need to first take take a look at how we landed where we are today. For those who remember, Chemdex, the turn-of-the-century Wall Street IPO darling servicing biotech and life science markets, was one of the first-to-market in B2B eCommerce. During the dotcom bubble, however, its stock utterly imploded to below 1% of its high, and since its epic demise, Chemdex has largely been singled out as a reason for holding the entire market behind its projected growth. In reality, however, Chemdex, along with others that followed, failed to prepare for the highly complex issues that are foreign to the B2C market, including:

  • Complex shipping arrangements involving multiple warehouses
  • Product and quantity availability
  • Undefined pricing
  • Customer order history
  • Product restrictions
  • Complex taxes
  • Disruption of the traditional sales model
  • Channel conflicts with existing field reps

These complex technological and logistical challenges have caused B2B to lag behind B2C for the better part of eCommerce’s existence, but over the past 5-years, the scene has drastically improved to meet these complexities. As a result (and despite its later start), B2B eCommerce has substantially overtaken B2C in order volume. In 2013, e-commerce wholesale sales generated $1.96 trillion, according the U.S. Census Bureau. Comparatively, in 2014, e-commerce retail sales only garnered an estimated $304.9 billion. This trend is signaling the arrival of an omnichannel wholesale world, where eCommerce and mobile lie at the center of the projected rise to $6.7 trillion in B2B online transactions by 2020.

Technology’s Impact on Clearing the Path Ahead

The rise in B2B eCommerce over the past few years has been the result of early adopters taking advantage of available technologies that have provided resolution to the challenges listed earlier. B2B inherently requires deep integration across multiple third party platforms, and leading B2B eCommerce and mobile solutions like Handshake integrate seamlessly across all areas of a business’ backend, including:

  • Enterprise Resource Platforms, to provide seamless interaction and communication with customer information, pricing, order history, and inventory.
  • Accounting Software integrations with programs like Quickbooks, to eliminate tax-related issues.

Currently, the volume of B2B eCommerce transactions exceeds $1 trillion, but only 25% of B2B companies, as reported by Oracle, have invested in a B2B eCommerce solution. The remainder still relies on buying and selling with paper invoices, printed catalogs, and faxes. Why is this?

Omnichannel at the Center of Customer Centricity

The final adoption hurdle among B2B wholesalers––one that holds many B2B wholesalers back from taking the digital dive––is the potential disruption that an omnichannel sales environment poses to their current system. The concern is that eCommerce and marketing begins to compete with sales for a share of orders, and attributing revenue sources becomes more challenging for field reps who may cultivate the relationship, but see their orders placed online. Others feel B2B eCommerce and field sales channels can effectively coexist and thrive more than ever before. Ultimately, however, though the initial steps to an omnichannel sales strategy may be challenging, in accordance with Bezos’ philosophy, these internal complexities matter little to the direction of the marketplace. Rather, customer demand is what drives the marketplace:What will stay the same over the next 10-years, from the customer’s perspective?Ultimately, those that empower their customers with simplified order processing, eliminate unnecessary and time-absorbing service calls, and provide a modern, integrated experience will ultimately prevail. Ten-years from now, customers won’t be calling into your customer service lines asking for more steps and barriers to placing a simple reorder. They’ll continue to demand a more efficient buying experience, and they will seek out whoever can provide it.

Final Thoughts

Leading wholesale companies and the B2B world at large know the future of sales lies in an omnichannel world. The fields are open and the technology is available. There’s also a window of opportunity in the market that forward-thinking companies can leverage while the rest of the industry lags behind (though not for long). Those that put the customer at the center of their universe and build a strategy around them are the ones that will make more sales today and still be doing so ten years from now. Questions about the Amazon B2B strategy or ways for other businesses to keep up with these developments? Let us know in the comments.